Are You Self Employed or a Worker?

The decision by a first-tier tax tribunal delivered on 10th February this year could have far reaching implications for thousands of people throughout the UK.

The case involved Christa Ackroyd and her 12 years at the BBC as a presenter on the programme Look North. Throughout this time, she was paid as a contractor through a personal service company which helped reduce her tax bills. However, the tribunal judge said: “We do not consider that Ms Ackroyd could fairly be described as being in business on her own account.”

This decision may have ramifications in other cases being brought forward by HMRC as well as cases involving the gig-economy. With Uber recently losing an appeal against a ruling that the ride-hailing app must treat its drivers as “workers”.

More cases are in the pipeline regarding the clarification of being a “worker” rather than self-employed. Deliveroo drivers, couriers, taxi drivers and plumbers are putting forward cases to have their status changed to workers rather than self-employed. This change would give them access to minimum wage and holiday pay.

Under tax rules a person is self-employed if they can decide what work they do and when. If their working hours and services they provide are controlled then they are not seen as self-employed.

This would be a good time for self-employed contractors to look to their situation and ensure they will not be liable for tax and NI payments for previous years. As HMRC can check back 20 years, it could be a costly mistake to have made.